Negotiations for a free trade agreement (FTA) between Australia and the European Union (EU) have hit an impasse, marking a significant setback after five years of deliberations. The deadlock emerged during the G7 trade ministers’ meeting in Japan, casting doubt on the likelihood of a deal before 2025, as indicated by Australian officials. This timeline is influenced by upcoming EU parliamentary elections in June next year and an impending federal poll in Australia.
Don Farrell, Australia’s Trade Minister, disclosed that the latest round of talks with his EU counterpart, Valdis Dombrovskis in Osaka, did not yield progress. Despite the setback, Farrell expressed optimism that a mutually beneficial agreement could eventually be reached between Australia and the EU. The primary points of contention revolve around EU demands to restrict the labeling of Australian feta cheese and prosecco, designated as protected categories within the bloc. Additionally, Australia has expressed dissatisfaction with the EU’s reluctance to open its market to tariff-free beef and sheep imports.
Murray Watt, Australia’s Minister for Agriculture, acknowledged the government’s willingness to compromise during the Osaka talks. However, he noted that the EU adopted a staunch position, leading to an inability to strike a satisfactory deal. Watt emphasized the EU’s protective stance on agriculture, suggesting a reluctance to make concessions in Australia’s favor.
Australia previously withdrew from a proposed deal in July, asserting that it did not provide sufficient trade access for the country’s agricultural products. This decision was influenced by pressure from Australian farmers, who voiced concerns about potential long-term disadvantages stemming from what former National Farmers’ Federation President Fiona Simson referred to as a “dud deal.”
The breakdown in talks reflects the growing challenges associated with securing free trade agreements in an era of increasing global protectionism. David Uren, a senior fellow at the ASPI think-tank, highlighted the complexities faced by large industrialized powers in pursuing such agreements within their constituencies.
While the EU successfully concluded a trade deal with New Zealand last year, agricultural and environmental considerations have hindered progress in negotiations with India and prevented the final approval of a pact with the Mercosur bloc in South America, which was initially signed in 2019. In response to the stalled talks, Dombrovskis expressed the EU’s willingness to continue negotiations for an FTA that would benefit consumers, businesses, and agricultural sectors on both sides.
